On 13 October 2014, EIOPA published a consultation paper on further technical work on the holistic balance sheet to gather input from stakeholders. The paper constitutes a further step in EIOPA’s work on a risk-based framework for occupational pension funds.
The consultation paper proposes improved definitions and methodologies to value the holistic balance sheet, covering areas such as the valuation of sponsor support, the benefit reduction mechanisms and discretionary decision-making processes and the definition of contract boundaries. The paper consults on different possible uses of the holistic balance sheet within a supervisory framework, ranging from an instrument to establish funding requirements to a risk management and transparency tool to assess the long-term sustainability of IORPs.
The further work on the holistic balance sheet has to be tested through a quantitative assessment. EIOPA expects to publish draft technical specifications for such an assessment by early 2015.
The consultation will end on January 13, 2015
More information can be found here
On 6 October 2014, PensionsEurope published a detailed position paper on the proposal for an IORP 2 Directive. PensionsEurope welcomes the Commission’s commitment to high standards of pension scheme governance and communications but is convinced that important features of the occupational pension sector need to be adequately taken into account in the Directive proposal.
The paper provides a detailed analysis and amendment proposals.
The position paper is available here.
PensionsEurope has today published the position paper on the revised Shareholder Rights Directive. PensionsEurope welcomes the intention of the Commission to encourage and facilitate long-term shareholder engagement with investee companies. An engaged shareholder base alongside high standards of governance, transparency and protection of minority shareholder rights should enhance the attractiveness of the EU market for both investors and issuers. However, PensionsEurope is concerned that some of the proposals might be too prescriptive for schemes.
You can read the position paper here
PensionsEurope has submitted a response to the Consultation Paper on Draft regulatory technical standards on risk-mitigation techniques for OTC-derivative contracts not cleared by a CCP under EMIR. In its response to this consultation of the European Supervisory Authority, PensionsEurope has expressed its concerns on the impact that the proposed measures would have on IORPs when trading derivatives. It is PensionsEurope’s view that said measures go against the rationale behind the temporary exemption from the clearing obligation granted to IORPs and their asset managers under EMIR. It also fails to recognise the very low counterparty risk of IORPs as well as the way they use derivatives to mitigate financial risk.
The PensionsEurope response is available here.
PensionsEurope was invited to an APFIPP seminar in Lisbon on 2 July 2014 where PensionsEurope chair Joanne Segars presented the PensionsEurope Manifesto. In the Manifesto, PensionsEurope expresses its concerns regarding the pension landscape in Europe. José Veiga Sarmento, APFIPP president, pleaded for an increase of workplace pensions in Portugal. He was supported by PensionsEurope Secretary General Matti Leppälä, who stressed the need for workplace pensions in Europe.
You can find an article in the Portuguese newspaper Expresso here.
The PensionsEurope Manifesto is available here.
PensionsEurope has today published a statement on the IORP II Directive proposal. PensionsEurope welcomes the intention of the Commission to improve governance and information provision for IORPs and that no additional capital requirement has been included in the proposed Directive. However, PensionsEurope is concerned that some of the proposals risk creating unnecessary extra burdens for schemes. This paper aims to focus on the general approach of the proposal and on key general issues for PensionsEurope.
PensionsEurope has adopted a position paper on Money Market Funds (MMFs). Long-term investors such as pension funds also make use of short dated instruments for the purpose of managing their liquidity needs on a diversified and efficient manner. PensionsEurope supports any initiative that is aimed at strengthening the financial sector, and even more so if that would result in a reduction of (systemic) risks. However, PensionsEurope does feel that any such regulation should be proportionate and that institutional investors, occupational pension funds and their asset managers more in particular, should not unnecessarily be restricted in their investment options.
The European Commission has today adopted a package of measures to channel funds to the real economy, in particular to long-term investment. The package includes a communication on the long-term financing of the economy, a legislative proposal for new rules for occupational pension funds (IORP II) and a communication on crowdfunding.
Commenting on the publication of the revised IORP Directive today, PensionsEurope welcomed the Commission’s commitment to high standards of pension scheme governance and communications, but cautioned that some of the proposals risk creating unnecessary extra burdens for schemes. The Press Release can be found here.
Occupational pensions should be excluded from the scope of the Regulation of the European Parliament and the Council on key information documents for investment products (PRIPS).
A full and unambiguous exemption should be included in the final PRIPS regulation to this extent. a clear disctinction should be made between occupational pensions on the one hand and personal pensions on the other. Occupational pensions are not a "financial product", but are a social benefit the employer offers with an employment contract.
You can find the position paper here.
28 November 2013 - Following its reaction to the Commission's Green Paper on Long-term Investment, PensionsEurope has prepared a position paper on the draft legislative proposal on the European Long-Term Investment Funds (ELTIF). Pension funds and other institutions for occupational retirement provision (IORP) are very suitable long-term investors due to the match with the long duration and maturities of their liabilities. Mutual investment vehicles such as ELTIFs are particularly important for small and middle-size IORPS, since they allow them to invest in long-term projects without jeopardizing the diversification of their asset allocation strategy. You can find the position paper here.